Labour Law - Unfair dismissal

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Part One

A.Alex has worked for ILL (International Leisure Location plc) a chain of leisure and sports clubs as a Sports Coordinator for 30 years. When he started working for ILL men and women had different retirement ages: 60 for women and 65 for men. Once this became unlawful, in 1986 retirement ages were equalized at 60. The trade union which was recognized by ILL negotiated an agreement that existing employees were given the option of retaining 65 as their retirement age, or moving to 60. Alex was one of a number who chose 60. Since 1986 it has been the practice of ILL to allow Sports Coordinators who wished to work on past 60 to take an annual medical and, if they passed it, to work on for an additional year, year by year, to a maximum of 65. Around 75% of Sports Coordinators have taken this option, with 90% of those working until they were 63. Alex will be 60 in September 2008. He has taken the medical examination and passed with the lowest score possible. His work record shows that he has been off with a number of illnesses over the past 2 years, totaling around 10 days each year. There have been two complaints against him by customers alleging failure to follow proper safety procedures in the last six months, both of which have been upheld and he has received two verbal warnings.

Alex very much wants to work on after his 60th birthday and wishes to work until he is at least 65. He has been disturbed by comments made to him by his line manager and the human resource manager which seemed to anticipate he would be retiring in September.

Discuss the law as it applies to Alex. Explain his legal rights and any procedures required to be followed by the employer. Explain what protection if any the law of unfair dismissal and the law of discrimination offer to him. (50% of the marks)

In the situation described, certain legal rights may be available to Alex under the law of unfair dismissal. Under ss. 94-132 of the Employment Rights Act 1996, every employee has the right not to be unfairly dismissed.

Although Alex has not yet been dismissed, it is likely he could be for the reason of retirement, which falls under one of the potentially fair reasons of s. 98(2) of the Act.

The first question to consider in this type of dismissal is whether the employer can show that the reason is retirement as defined by the ERA, ss.98ZA-98ZE. This in turn depends on whether there is a normal retirement age in the contract of employment.

If the employer retires the employee before the age of 65 it will be classed as unfair dismissal, unless the he can objectively justify his actions, or there is a normal retirement age. In the case of Alex, his employers might retire him at the age of 60.

This leads to the next consideration, which is whether or not there is a normal retirement age. The normal retirement age (NRA) is defined in s. 98ZG of the ERA as the age at which other employees working for the same employer are normally required to retire. The normal age will usually mean the contractual age, which is the age as stated in the contract. This is evident from the case of Wall v British Compressed Air Society, in which the employee was dismissed at the age of 67, and claimed unfair dismissal as his contract provided a retirement age of 70. It was held that the normal retirement age was the same as the age stated in his contract, as he held a unique position in the company and therefore could not compare retirement age against other employees. In the case of Alex, it seems his contractual age is 60, as this is the age which he chose during trade union negotiations.

However it can sometimes be shown that in practice, if the contractual retirement age is significantly departed from, then this is the normal retirement age. The leading case on this matter was originally the Court of Appeal decision in Nothman v Barnet London Borough, which held that the NRA was the minimum age at which an employee could be required to retire, as distinct from when employees usually retire in practice. The case of Waite v GCHQ also followed this principle. In this case the minimum retirement age was 60, but the employers had the discretion to keep employees on until the age of 65. The employee claimed unfair dismissal when he was dismissed at 60, however it was held that the normal retirement age was not equal to the contractual age, and there was no evidence that in practice, employees would ordinarily continue working up to the age of 65. Here, Lord Fraser stated that if it can be shown that the CRA has been abandoned for the NRA then this is acceptable, but as only one quarter of comparable employees in the Waite case continued working past 60 this was not enough to ‘abandon’ it. This case is similar to the situation described, as it has been the practice of ILL for 30 years to allow employees to continue working until they are 65, as long as they have passed a medical. As 75% of other sports coordinators have taken up this offer, and 90% have worked until they are 63, it seems that this is a significant amount of comparable employees to show that the contractual age of 60 has been abandoned. If it was shown that there was a variety of different retirement ages, it could be found that there was no NRA, however there is no mention of the various ages in the situation described.

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Therefore it seems that 63 is the normal retirement age. However, as this is below the age of 65 the employer must justify it as a proportionate means of achieving a legitimate aim, otherwise it will be age discrimination. As Alex works in the sports industry he could be required to keep fit and healthy, which may be justification for the lower NRA. This is apparent from the medical which employees must pass after the age of 60 if they wish to continue working. Therefore, if Alex was dismissed at 60 he could claim unfair dismissal, as it is below ...

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